United States District Court, D. Minnesota
TEMPORARY RESTRAINING ORDER
A. Magnuson, United States District Court Judge
matter is before the Court on Plaintiff Securities and
Exchange Commission's (“SEC”) Emergency
Motion for a Temporary Restraining Order, Asset Freeze, and
Other Ancillary Relief. On Friday, May 5, 2017, the Honorable
Donovan W. Frank of this Court entered a limited TRO (Docket
No. 25), pending this Court's hearing on the matter. The
Court held that hearing today, at which Plaintiff appeared
through counsel but Defendants made no appearance.
on the arguments of counsel, and all of the papers filed in
support of the Motion, the Court makes the following factual
A. This Court has jurisdiction over the subject matter of
this case and there is good cause to believe it will have
jurisdiction over all parties hereto.
B. The SEC has made a prima facie showing that Defendants
have engaged in acts, practices, and transactions that
constitute violations of Sections 17(a) of the Securities Act
of 1933 (“Securities Act”), 15 U.S.C.
§§ 77q(a); Section 10(b) of the Securities Exchange
Act of 1934 (“Exchange Act”), 15 U.S.C. §
78j(b), and Rule 10b-5 thereunder, 17 C.F.R. §
240.10b-5; and Sections 206(1) and (2) of the Investment
Advisers Act of 1940 (the “Advisers Act”), 15
U.S.C. § 80b-6(1) and (2), by using any means or
instrumentality of interstate commerce, or of the mails, or
of any facility of any national securities exchange.
C. There is good cause to believe that investor funds will be
dissipated, concealed, or transferred from the jurisdiction
of this Court, assets which could be subject to an order of
D. There is good cause to believe that an accounting of
assets and expedited discovery is necessary, and that, unless
restrained or enjoined by order of this Court, Defendants may
alter or destroy documents relevant to this action.
E. There is good cause to believe that an order requiring
Defendants to provide a schedule identifying any individuals,
clients, or investors who paid Defendants monthly fees for
services and/or who provided Defendants access to brokerage
or other accounts, and the accounts so accessed is necessary.
on these findings, IT IS HEREBY ORDERED that:
SEC's Motion for Temporary Restraining Order (Docket No.
4) is GRANTED.
Defendants, and their officers, agents, servants, employees,
attorneys, subsidiaries, and affiliates, and those persons in
active concert or participation with any of them, who receive
actual notice of this Order, by personal service or
otherwise, are TEMPORARILY RESTRAINED and ENJOINED from,
directly or indirectly, in the offer or sale of any
securities, by the use of any means or instruments of
transportation or communication in interstate commerce or by
the use of the mails:
A. employing any device, scheme or artifice to defraud;
B. obtaining money or property by means of any untrue
statement of a material fact or any omission to state a
material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
C. engaging in any transaction, practice, or course of
business which operates or would operate as a fraud or deceit
upon the purchaser; in violation of Section 17(a) of the